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ARTICLE · 22 JUNE 2020

CBDT Clarification On Tax Residency – A Scope For New Interpretation

As per the OECD Convention Model, 2017 the term resident of a country means any person who, under his native country is liable to tax therein by reason of his domicile, residence or place of effective management.

IndiaTax

BACKGROUND

As per the OECD Convention Model, 2017 the term resident of a country means any person who, under his native country is liable to tax therein by reason of his domicile, residence or place of effective management. Due to COVID-19, if an individual is present in a jurisdiction for a considerable amount of time, it may raise questions regarding the change of the individual's place of residence.

In India, individuals are classified as resident & non-resident under Section 6 of the Income Tax Act, 1961 on the basis of the duration of their stay in the country during the financial year. The threshold for this stay was 182 days which was revised by amendment in Finance Act, 2020 to 120 days.

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